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Hey guys. You must made the right comparisson to know if you are selling yourself cheaper than a hotel. At first you must wipe out from the hotel rate, the breakfast and the daily cleaning. It´s true that when a guests books with a hotel he pays VAT and other taxes but it is als true that when he books with us he pays 15% of service fee (3% to us + 12% to them) and in some cities Airbnb have started charging VAT and tourism taxes too so this calculation should be address properly depending in the city you are advertising.
In a brief summary the net hotel rate should be close to what you have being charged in your credit card minus what you must pay for a similar breakfast in your town minus the cost of the daily cleaning service. That net rate is what you must compare to your Airbnb rate. But please don´t forget the size of your place neither the fact that you provide a kitchen! If you are offering a 800sqft feet apartment at the same net rate or even a bit higher than a 250sqft hotel room then you are being cheap (SUPER CHEAP).
I’m booked flat out through the high season in Barcelona and bc of the limit of only renting out for 90 days a year in SF we are booked at fairly high rate for our 90 days.
People want space and to live like a local, that is the biggest draw.
I’m curious by what you mean by ‘licensed b&b’. I have a business license, business insurance, and pay all business taxes. However, I’m not licensed to cook food - but I’ve found lots of nice things I can prepare legally like frozen quiche - but I can’t cook actual food. Is that what you mean, that you have a commercial kitchen (or whatever is needed in CA)?
I do, however, still consider myself a ‘B&B’ but maybe there’s more to it?
Hi Dcmooney
What it means is that we are compliant with all state regulations. In fact, we hold the record for the most permits and variances ever issued for one project in the history of our town. We took an 1850s Victorian property, renovated it in three phases and turned it into a licensed bed-and-breakfast. We are compliant for fire safety codes, food handling certifications, parking, signage and all local and state laws necessary to run a historic, VIctorian bed-and-breakfast. We are inspected annually for electrical, fire codes, food handling and all necessary safety protocols. We have specialty bed-and-breakfast insurance through Lloyd’s of London and pay local and state taxes for business, lodging and water consumption as required quarterly.
Well in Germany, I do include VAT in my Airbnb invoice if guests ask for one, which means 7 per cent of the earnings will go to the tax man. So I don’t really understand your “costs we don’t have” regarding VAT.
Well, here in France, we don’t pay VAT on rental income (unless you decide to, for very specific tax optimization reasons). But as a general rule we don’t .
Well I am not a tax expert, so I guess I will have to look up details. In Germany, we don’t pay VAT on long-term rental income, either. But Airbnb isn’t long-term, rather, it is more like a hotel. Most of my guests only stay one night.
It also depends on where you are and the quality and size of the accommodation you are offering. You have a luxury place in a desirable area so you aren’t going to charge backpacker/hostel rates.
Is your service really better? Do you have staff working 24 hours to handle anything a guest needs, for instance? Do you clean the room daily? Do you have room service and do wake up calls?
Reality is if you think your listing is worth more, increase your prices and make sure your description describes why it’s so good.
In my case I don’t provide any of the services a hotel does, I give people the key and leave them alone for their stay. So it’s cheaper than a hotel because I’m not providing those services.
I used to book airbnb but the prices have gone up, their service isn’t as good (you go to book and it books at twice the price) and property managers place fishing adds that waste my time. I used to love getting a more personal experience and a better price but not anymore. It’s sad that we can’t keep things nice. They always have to be ruined by greed.
Is the service better? Yes, because I can give personal recommendations that hotel concierges can’t, (Some, not all, get paid for recommendations). Although I am not available to 24 hours a day, guests know that they can contact me seven days a week (10 am to 7 pm) should they have issues.
Do I clean the room daily? No. But if guests need extra towels or the bed changing during their stay, I’m here to do so.
Wake up calls? Come on, I can’t remember the last time I had a guest without a cell phone - they don’t need wake up calls. That is so 1980s.
I am 100% convinced that we offer better value and a better experience than any local hotel.
But we do have overhead. There are the sheets, comforters and towels we buy. Soap, lotion, mouthwash, shampoo, cups, mints, water (in my case, we provide these). In our house we do serve breakfast. Then there’s wear and tear on household goods. Many hosts do elaborate remodeling and/or decorating before opening up for business. We didn’t do that, but we’ll do some of that down the road.
It’s a tiny overhead. Most guests bring their own toiletries. Within 2 years 2 of my towels were damaged. My water bill for 3 private rooms increased by 12$ a month.
It’s such an insignificant overhead that it’s not even worth mentioning.
I bought 3 TVs but it will be there forever. Of course I did spend money but it was once and for all. And it’s not a continuing overhead like paying employees .
That is the case for you. Different hosts do things different ways, and their listings have different amenities and needs. Also, we often have different clientele from one another based on our location and what we offer. My overhead seems to be a bit more than yours, and the luxury houses and apartments, etc. would have far higher overhead than I do. My only point is that we can’t generalize to everyone based on our own personal experience.
Actually we can in this case. Airbnb is based on on the idea that we just rent out what we already have . We don’t have to build anything. Of course it evolves into other ventures like buying a property specifically to do Air but most people just rent out available space
.